A company provided the following information on sales for the coming year: $\begin{array}{lrrrr}&\text { 1st Quarter }& \text { 2nd Quarter } &\text { 3rd Quarter } & \text { 4th Quarter }\
\text { Units } & 40,000 & 40,000 & 30,000 & 80,000 \
\text { Average selling price } & \$ 5 & \$ 5 & \$ 5 & \$ 6
\end{array}$ Assuming that the beginning inventory is 3,000 units, and that the company policy is to have 25% of the next quarter's sales in ending inventory, which quarter will have the lowest production?

Question

Quizplus · Accepted Answer

Quarter 2 will have the lowest production because it has the same sales as Quarter 1 but requires less ending inventory due to lower sales in Quarter 3.

A Company Provided the Following Information on Sales for the Coming